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Monday, July 21, 2008

Moscow: The uranium industry’s worst year is about to collide with a nuclear construction programe in India and China that rivals the ones undertaken during the oil crisis of the 1970s.

The result is likely to be a 58% rebound in uranium to $90 (Rs3,870) a pound from $57 now, according to Goldman Sachs JBWere Pty. Ltd and the Rio Tinto group, the third biggest mining company. Uranium plunged 57% in the past year as an earthquake damaged a Japanese plant that is the world’s largest and faults shut down reactors in the UK and Germany.

Plans for India and China to end electricity shortages will ripple from Canada to the Australian outback and the flatlands of Kazakhstan, the primary sources of uranium. India will start three reactors this year, with another six due next year in India, China, Russia, Canada and Japan. Uranium demand worldwide will rise as fast as oil this year, or 0.8%, Deutsche Bank AG forecasts.

Scarce commodity: The Hamaoka nuclear power station in Japan. Uranium plunged 57% in the past yearas an earthquake damaged another plant in Japan and faults shut down reactors in the UK and Germany.(Photo: Robert Gilhooly/Bloomberg)

“The first wave of growth is going to come from the emerging economies,” said John Wong, fund manager with CQS UK Llp. in London, which has $10 billion under management including $150 million of uranium investments. “People are starting to look at coal, gas, oil and seeing the energy prices go up, they wonder about uranium.”

Sunday, July 20, 2008

SINGAPORE: Global market meltdown, recession and bankruptcy fears and dipping profits of companies are wrecking major economies in the world these days. But ace commodities investor Jim Rogers continues to be very be hot on China.

”China is a country I am very hot on. I believe that Chinese economy will overtake the US economy, and China has the best investment potential in the world today,” Rogers, author of such famous books like Hot Commodities and A Bull in China, told Commodity Online.

He said three billion people living in Asia, most of them in India and China, will account for a major portion of the total demand for commodities in the coming years.

”Asia is fueled by massive investment and growth. And in Asia, China is the hottest destination. So I continue to look for investment opportunities in China,” Rogers, who along with billionaire investor George Soros founded the successful Quantum Fund. For more information on the Quantum Fund, click here to access George Soro's trading website (http://www.sorostrading.com/)

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Rogers may be hot on China; but when he talks about India, the legendary investor gets cold feet. “I am excited about India as a travel destination. For an investment proposition in India, I would think twice,” he said.

He says even though India like China has been growing phenomenally well, political and bureaucratic hurdles still exist in India. “Plus, the infrastructure in India continues to be bad compared to China. In China, truck drivers drive at the speed of 70 kilometers per hour. In China, they can drive only at a speed of 20 kilometers because the roads are so bad,” Rogers said.

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Unparalleled coverage of Sovereign Wealth Funds, their investment strategies, and the controversies that surround them

Countries rich in foreign exchange reserves – often oil-derived – have emerged as some of the most powerful global investors. Some $80 billion has already been ploughed into bank shares or bank equity stakes in the U.S. alone. In the wake of the current credit crunch, developed economies have generally welcomed the timely infusion of capital, but there is growing unease too.

Governments are concerned that foreign ownership of key domestic assets (including corporations, banks and infrastructure) may threaten national security, and they are pressing the funds to be more transparent about their management and strategy. For three years in a row, Sovereign Wealth Funds have grown a remarkable 24% annually, and now exceed some $3.5 trillion.

If growth rates remain constant, they will surpass the entire current economic output of the United States by 2015, and Europe by 2016. Their importance already rivals that of hedge funds and private funds combined.

- Detailed 3 year forecasts of sovereign wealth growth by country, broken down by type- Overall sovereign wealth forecast out to 2016- Analysis and implications of significant events by country within each region- Legal and policy environments affecting sovereign wealth flows- Detailed coverage of institutional and market developments, investment vehicles, and specific mergers and acquisitions

Key findings of the Sovereign Wealth Fund Tracker:

The largest Sovereign Wealth (SW) generator remains China, with approximately US$1.2 trillion, followed by Russia and Kuwait.

The fastest growing generators of SW over the last five years were: Nigeria 291%: Oman 256%; Kazakhstan 162%; Angola 84%; Russia 74%; and Brazil 65%.

High energy and commodity prices, combined with a declining dollar, have turbocharged Sovereign Wealth Funds (SWF) in the Middle East, and spawned a new generation of these Funds.

The vast majority (93%) of SWF equity investment has so far targeted the western financial sector. But there is new interest in energy and mining companies.

In January 2008 alone, worldwide acquisitions by SWF's totalled US$20.6 billion or nearly one-third of the total US$60 billion that SWFs made in mergers and acquisitions (M&A) for the entire year 2007. SWFs accounted for 35% of world M&A activity in 2007, and 28% of all M&A in the US during January 2008, exceeding M&A activity from private equity buyouts, which fell in the last quarter of 2007, as the credit crunch unwound debt leveraging.

SWFs have fostered new alliances with private equity to avoid scrutiny. SWFs already account for approximately 10% of private equity investments globally and should grow further in the next few years.

Global Insight is a leading provider of intentional financial and economic information and analysis. Visit their website to sign up for the news letter and reports on topics such as SWF's, energy analysis, global macro economic conditions, and more.